Friday, April 30, 2010

Regulatory Forbearance

The NCUA Board on April 29 voted to extend a waiver permitting corporate credit unions to continue using their November 30, 2008, capital level to determine regulatory compliance with capital-based requirements and limitations in NCUA's corporate credit union regulations.

NCUA’s decision to provide regulatory forbearance deals with the fact that several provisions setting regulatory limits and requirements are based on corporate credit union capital. The capital positions of corporate credit unions have been severely impaired by losses from mortgage-backed security investments and equity investments in U.S. Central. To ensure uninterrupted service to natural person credit unions, NCUA is permitting corporate credit unions to operate with their capital levels reported on November 30, 2008.

The NCUA Board also established a new termination date for the extansion of the waiver, which is one year after the final corporate credit union rule is published in the Federal Register. So, NCUA will engage in regulatory forbearance for at least another year.

The following two tables report the core capital and total capital ratios for corporate credit unions as of November 30, 2008 and January 31, 2010 (click on images to enlarge).


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